Elgi Eqiupments pants to be No.2 in world air compressor market
The world air compressor market is growing steadily year on year. As the market size is anticipated to be USD 20 billion in 2023, with 3.6% CAGR, Elgi Equipments, one of India’s leading air-compressor manufacturers, plans to become World No.2 in the global market by 2027.
The company has opted to take the innovation route to be World Number 2 in the global air compressor market by making the products energy efficient, oil free and with increased uptime reliability. Elgi air compressors are more power-efficient than the competing products in the overseas markets. Elgi has always focused on strengthening its attention on indigenous technology, research and development to innovate newer technologies in the air compressor industry.
“Elgi as a brand that is over 50+ years, has constantly evolved as a global leader in providing complete range of compressed air solutions leaving behind satisfied customers across all industrial verticals. Air-Compressors are the “life source of all industries” and the need will never diminish. With our best-in-class lifecycle cost driven by low specific power consumption and maintenance cost, we strive to run all manufacturing facilities across the world with Elgi compressors,” Jairam Varadaraj, Managing Director, Elgi Equipments said.
The plan of Elgi Equipments to become the number 2 in the global air compressor market in 10 years is to be carried out also through inorganic growth. “We aspire to become the number 2 firm in the global air compressor market by 2027 by acquiring overseas distributors and setting up assembly lines in the US to increase our market share,” Varadaraj said.
“Our acquisitions will be in developed markets like the US and Europe. We are looking at acquiring existing distributors in those markets,” he said. Elgi has identified about 25 distributors in the US and Europe and has set aside Rs 5,000 crore for this. He said the company will set up an assembly line in the US once the sales volumes there touch 1,000 units per year. At the end of the 10th year, Elgi Equipments’ wish is to move from the present 7th slot to 2nd slot. Varadaraj hopes that 70% of growth would come from acquired business and 30% through organic growth.
The air compressor market globally is estimated to be worth about $15 billion and in India it is $600 million. Last year, Elgi posted a turnover of $230 million, with 90% from compressor business. Almost 50% of the revenue is from exports. In 5 years the company aims to increase its revenue to $1 billion. For this it might invest around Rs 1200 crore over the next 3 years to beef up its infrastructure.
“In the last 8 years, we have posted a cumulative annual growth rate of 14.3% against the industry growth rate of 2.5-3%. If we have to achieve the aspirational level, we have to clock CAGR of 28%. It is not going to come through organic growth. We have to achieve this through inorganic growth too. We have the product, process, people and technology to achieve this,” he said.
The company has also unveiled the new brand identity with a new logo and colour scheme for its entire product range. Red and Black are more distinct and dynamic than orange and grey. Red stands for performance, passion and energy. It reflects the drive to constantly evolve and keep getting better. Black is clear, bold and helps establish a distinct brand world.
Jairam Varadaraj, Managing Director, Elgi Equipments along with the newly launched EG 22 air compressor